Who is dumping Bitcoin? The selling pressure from whales offsets ETF buying, making the March rebound unable to hide the demand vacuum.

Zhitong Finance APP learned that data analytics platform CryptoQuant shows that although institutional buy volume has increased, Bitcoin demand continues to face sustained pressure, indicating that the broader market is still selling off this token. As of the end of last month, the “apparent demand” indicator—measuring Bitcoin demand relative to the amount of newly mined Bitcoin—was negative, at about 63,000 BTC. This situation emerged against the backdrop of a strong buying period in spot exchange-traded funds (ETFs) and Strategy Inc. (MSTR.US), the digital asset company led by Michael Saylor, continuing to add to its Bitcoin holdings.

The report states: “Retail and other market participants’ selling volume exceeds institutions’ incremental purchases. The ongoing demand contraction since late November 2025 confirms that the overall market is still in a distribution phase.” The data shows that the market is facing a scenario where new demand is being offset by reduced selling from existing holders—this dynamic, even when institutional interest appears to be building up, may still limit upside.

Although Bitcoin barely managed to end its prior five-month streak of declines in March, recording a modest rebound of about 2.2%, the broader market’s rebound momentum appears to be lacking stamina. The core issue is that the large holders, known in the market as “whales,” have completely shifted from a long-term accumulation pattern to an aggressive net selling pattern; this wave of massive selloffs directly offsets the bullish sentiment brought by recent spot ETF inflows and some corporate additions.

Judging from the historical flow of funds, these whale investors had accumulated about 200,000 Bitcoins during the 2024 bull market. However, after the price hit its highs in mid-2025, these holdings began to loosen significantly, and distribution accelerated markedly in the fourth quarter of 2025.

Even if the Bitcoin price stabilizes above $68,000 by the end of March 2026, compared with the $126,000 all-time high set in October 2025, its decline is still close to 45%. This structural de-risking behavior reflects early holders’ risk aversion toward the current high-interest-rate macro environment and geopolitical volatility; whales continuing to exit has become the main resistance suppressing a rebound in the coin’s price.

Meanwhile, mid-sized investors who had been adding to positions have been slowing their buying pace, which removes yet another layer of support. In recent weeks, domestic U.S. Bitcoin demand has also weakened; the Coinbase premium index (an indicator measuring the price gap between U.S. exchanges and offshore exchanges) turned negative again, indicating that U.S. investors are no longer competing to push up Bitcoin prices.

Although corporate institutions led by Strategy Inc. continued to expand against the trend in the first quarter of 2026, pushing its holdings to a new high of about 762,000 coins, and although U.S. spot Bitcoin ETFs also saw net inflows of about $1.32 billion in March—reversing the prior four-month streak of net outflows—these buy orders still cannot fully eliminate the market’s overall sell pressure.

However, CryptoQuant says that if the macro environment improves, especially if the Iran-U.S. conflict is downgraded, the Bitcoin price may rebound in the short term. The report says: “A easing of geopolitical tensions could become a positive catalyst in the near term, potentially triggering a round of rebound-like upward moves.”

Looking ahead, because selling pressure remains dominant, the market is taking a cautious view of Bitcoin’s near-term price trajectory. According to the latest odds from prediction markets such as Polymarket, traders believe the probability of Bitcoin falling to the $55,000 level within the year is as high as 74%.

With demand failing to show explosive growth, turnover of holdings between large holders and institutions will continue to drive market volatility. The current situation of “institutions struggling to absorb shares while whales retreat and exit” suggests that Bitcoin may need more time to digest the redundant supply from high-level selloffs before it can truly begin a new round of trend-based upward movement.